The Tiffany & Co jewellery chain has been ordered to pay the Swatch Group $448m (£274m) over a failed joint venture.
In 2007 a deal was struck between the two parties to make watches together under the Tiffany Watch Co brand. The partnership was intended to last for twenty years and give Tiffany a much bigger place in the luxury watch market, but things came to an unfortunate head in September 2011 when the Swatch Group terminated the collaboration for breach of contract and pressed claims for damage. In 2012, Tiffany & Co. filed a counterclaim.
In their lawsuits, Swatch Group had faulted Tiffany for “systematic efforts to block and delay development of the business,” whilst Tiffany had said that Swatch did not honour the terms of the agreement, including providing adequate distribution.
The companies sued one another in arbitration court in the Netherlands, where their Tiffany Watch Co joint venture was based. As well as their counterclaim being dismissed, it was ruled that Tiffany & Co must pay the Swatch Group 402 million Swiss francs (US$448.79 million) in damages, as well as US$9 million to cover legal fees.
Tiffany’s said it would record a fourth-quarter charge of $295 million to $305 million as a result of the ruling.